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Alabama Motor Vehicle Dealer Bond and Designated Agent Bond

Alabama Motor Vehicle Dealer Bond and Designated Agent Bond

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Who Requires the Motor Vehicle Dealer Bond and Designated Agent Bond and Why Is It Needed?

Salesman. Motor Vehicle Dealer Bond for auto dealers or others who buy, sell, auction, or repair cars or other motor vehicles.

As a licensing requirement, car dealers and related businesses in the state of Alabama must post a surety bond in the amount of $25,000. The surety bond is mandated by the Alabama Department of Revenue’s Motor Vehicle Division for new and used motor vehicle dealers, designated agents, rebuilders, reconditioners and wholesalers.

How Much Will My Surety Bond Cost?

Take 2 minutes to provide the basic information required to get the best rates for your Alabama Motor Vehicle Dealer Bond and Designated Agent Bond. The quote request is free and there is no obligation to you. If you prefer, please call 1‐800‐608‐9950 to speak with one of our friendly bond experts. We can help guide you through the bonding process and identify the lowest cost in the market for your situation.

If you are interested in spreading out the cost of your bond over time, we can offer convenient financing plans for many types of surety bonds. More information will be provided with your quote.

What Does the Bond Protect Against?

The surety bond protects those who may be damaged by the dealer’s violations or non-compliance with applicable language in Sections 32 and Section 40 of the Code of Alabama 1975.

In the event that a third party sustains financial losses due to the dealer’s violations, the surety company may be liable for reimbursement up to the full bond amount of $25,000. The bond principal provides indemnity to the surety company for any losses paid out to third parties. This bond is continuous until canceled by the surety company by providing 60 days advance written notice to the Alabama Department of Revenue.

 

What is Needed to Obtain My License?

The following is an overview of key motor vehicle dealer licensing requirements in Alabama. 

  • Completed Dealer License Application
  • Dealership Signage per specifications
  • $25,000 surety bond
  • Liability insurance
  • Payment of license and application fees as required
  • Additional items may be needed and exact requirements may vary based on applicant, license type or obligee discretion. Please see obligee and state links in the Other Helpful Information and Links section below or contact the obligee directly for more information.

 




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